Applicable as of January 18, 2017, a recently adopted European regulation facilitates cross-border debt recovery by enabling creditors to obtain a “European Account Preservation Order” (the “EAPO”) given by one judge in a member state and attach a debtor’s bank accounts in another EU member state without further court proceeding. The EAPO will enable creditors to obtain an order (i) before the creditor initiates proceedings on the merits against the debtor, (ii) at any stage during the proceedings until a judgment or settlement is entered, and (iii) after a judgment or court settlement that requires the debtor to pay a claim. Before a judgment is entered, the national courts that have jurisdiction to rule on the merits will also have jurisdiction to issue an EAPO. If the creditor has already obtained a judgment, then jurisdiction lies with the courts of the member state where the judgment was obtained.
An EAPO is an alternative remedy. The order will only be available in matters that have cross-border implications and may only serve preservation purposes. This means the debtor’s bank account is provisionally frozen and the amount seized is transferred to a dedicated account kept by the competent enforcement authority. To get the pre-judgment order, the creditor must show that he will probably obtain a favorable judgment against the debtor in the proceedings on the merits. No notice is given in seeking the order. The debtor may also not be informed of the order before it is enforced. An EAPO will not apply where claims are against a debtor in bankruptcy and where funds are exempt from attachment under the laws of the member state of enforcement.